Critical Access Hospitals Get Funding For Health IT to Stimulate Economy

There’s good news this month for critical access hospitals (CAHs). The Obama administration is offering loans so CAHs can catch up to their urban contemporaries through modernizing their health IT systems. Over 1,600 CAHs across the country will be able to apply for the loans. Not only will this improve patient safety and quality of care, but will allow many rural CAHs to qualify for the Centers for Medicare and Medicaid Services (CMS) Meaningful Use incentives.

Currently, most CAHs are in rural environments with limited financial resources that prevent the adoption of new technology. With this health IT funding plan, the federal government has three goals:

1. Increase adoption of health IT.
2. Increase physician recruitment.
3. Increase local economies by creating other areas of job growth.

The U.S. Department of Agriculture (USDA) and the Department of Health and Human Services (HHS) will oversee the loan programs. It’s their task to link rural hospitals and clinicians to existing capital loan programs. The reason is most rural hospitals have lower financial operating margins and limited capital than urban locations.
With this program, a CAH with 25 beds or fewer can use loans to recruit new physicians. This stimulates the local economy. On average, a CAH can create around 107 jobs and generate $4.8 million in annual revenue whereas adding one primary care physician in a rural community generates only approximately $1.5 million in annual revenue and 23 additional jobs each year. Between the financial and economical benefits, and the increased quality of care, it is clear that funding the adoption of improved health IT systems for critical access hospitals will have a profound impact on our nation, specifically rural communities